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Morocco
Please note: All linked documents are in PDF format
| Objective |
SO Number |
FY 2004 |
FY 2005 |
FY 2006 |
| Free Trade Agreement Support | 608-011 |
3,400 |
7,200 |
17,600 |
| Education For a Better Future | 608-012 |
2,000 |
14,640 |
12,400 |
| Improved Government Responsiveness to Citizens | 608-013 |
|
4,000 |
11,000 |
|
Total (in thousands of dollars) |
5,400 |
25,840 |
41,000 |
|
The Development Challenge: Morocco has a per capita income of $1,200, placing it in the lower class of middle-income countries in the region. Its social indicators are among the lowest in the region. Approximately 49% of adults aged 15 and above were illiterate in 2002, placing Morocco at 20th among the 22 Arab League countries (surpassing only Mauritania and Yemen). Women are particularly affected, with female illiteracy rate at 62 percent, and significantly higher in rural areas.
Progress made in the early nineties in poverty alleviation has been lost: approximately 20% of the total population remains under the absolute poverty line (about one dollar per day), with two-thirds being located in rural areas (3.5 million, or more than 10% of the population). Moreover, about 55% of the rural population and 33% of the urban population were considered "economically vulnerable" in 2003. The country's economy remains overly dependant on rain, and adverse climatic conditions directly impact the level of rural poverty. Economic growth is further constrained by government policies that retard rapid modernization of the rural economy, diversification of cereal production, and efficient use of scarce water resources. Urban poverty is a direct consequence of unemployment, which is particularly high among youth (up to 35.4% in 15-24 year olds in 2004 alone). Such a high unemployment among youth contributes to insecurity and instability in urban areas.
In 2004, the government managed to maintain macro-economic stability, continue its investment program and advance the implementation of its reform agenda. At around 3.5% of the gross domestic product (GDP), the fiscal deficit will not exceed affordable levels and inflation will be contained around 2%. With regard to public investment and policy reform, achievements exceeded targets in many sectors. For example, the number of students enrolled in vocational training doubled as compared to the previous year. Social programs, including rural electrification, potable water and rural roads met or exceeded targets. A new family code -- Moudawana -- considered as one of the most progressive in the Arab region, was promulgated. Free trade agreements were signed with the U.S. and several countries in the region. The health coverage scheme began as planned and the liberalization of several sectors (air transportation, radio-TV, and telecommunications) met set deadlines.
The above progress was achieved despite several adverse exogenous events. In February, a violent earthquake hit the northern region of Al Hoceima. The disaster killed more than 1,000 people and damaged basic infrastructure and houses in an already poor, underserved region. Despite donor support, the country continues to carry a significant financial burden, and the living conditions in that region are still substandard. In February, locusts began to invade the south of the country. The government mobilized substantial equipment and resources to successfully stop the expansion of the swarms. Morocco also provided significant support to its neighboring countries (Mauritania, Senegal, and Mali) to contain the plague. Despite these efforts, locusts returned in large numbers in the fall, with swarms reaching the north-eastern region and spreading from the Canary Islands to the Middle-East. The unprecedented increase in oil prices was a significant shock that affected Morocco's economy as well. Unlike most countries in the region, Morocco imports almost 100% of its oil. The Government of Morocco's (GOM) policy to preserve the purchasing power of the poor requires keeping energy prices at a stable, affordable level. Thus, instead of raising the prices to keep up with imported oil levels, the government automatically reduces the level of taxes, which directly impacts its revenues and widens the fiscal deficit.
Morocco is important for U.S. interests in the region as its oldest ally and as a stable, democratizing, and liberalizing Arab Muslim nation. It is also important as a partner in the global war on terrorism and as a constructive force in the pursuit of Middle East peace and other regional security challenges. The key challenges for the country are creating jobs for a fast growing labor force and addressing the gaps in meeting the basic needs of the population.
The USAID Program: For USAID/Morocco, FY 2004 was an intense and challenging year because of the transition between two strategies and the overlap of old and new activities. This transition between two strategies was smoothly done at the same time that the Mission was managing a 50% reduction in force. The Mission smoothly closed out five old Strategic Objectives (SOs): increased opportunities for domestic and foreign investment; improved water management; population, health and nutrition; basic education for girls; and support for civil society. Also during this year, the Mission designed new activities in the areas of economic growth and job creation, education and workforce training, and democracy and governance. Brief descriptions of three objectives are below.
Increased Economic Growth and Job Creation (Strategic Objective 11): USAID Morocco initiated the design of three separate but complementary programs whose objectives are: 1) increased productivity in agriculture and agribusiness; 2) the creation of new business opportunities in areas outside of agriculture and agribusiness; and 3) an improved business environment. A contract for the first program will be awarded by late December 2004 or early January 2005, while the other two will be contracted in early 2005.
Improved Education and Training for Employment (Strategic Objective 12): USAID finalized the design of the new activity and launched a major procurement through full and open competition. The contract was awarded after the fiscal year ended. Concurrent to this major procurement, USAID launched two new, visible start-up activities for the new SO: 1) a Global Development Alliance (GDA) public-private partnership between USAID, CISCO, UNIFEM and the GOM, entitled Achieving E-equality in Information Technology, and 2) the National Education Accounts (NEA) pilot project with the Ministry of National Education (MNE).
Improved Government Response to Citizen's Needs (Strategic Objective 13): The DG team finalized the design and concluded a contract for assistance to the parliament (Intermediate Result 13.1). Other procurements are underway. In addition, programming continued from the previous SpO 9 to improve government responsiveness to the needs of women. The adoption in 2004 of the revised Moudawana requires increased awareness of these new and expanded rights for women on the part of many government officials and Moroccan women alike.
Other Program Elements: As of 2004, 22 Middle East Partnership Initiative (MEPI) activities were implemented in Morocco through USAID mechanisms. Eighteen of these were directly managed by USAID/Morocco under the pillars focusing on politics, economics, education and women. Total Morocco-specific commitments/earmarks amounted to $16,624,000, including multi-country programs. While approximately half of MEPI funds transferred to USAID/Morocco were obligated under existing or new agreements, unilateral commitments have dramatically increased the number of management units. The amount of management units has affected the Mission's ability to implement and manage the programs efficiently. In addition to operational challenges, USAID/Morocco faces programmatic challenges, as an internal audit demonstrated that not all of the MEPI-funded activities contribute to its strategic objectives, and performance indicators were not defined. The quick-response nature of selected activities is not always consistent with the need for sustainability.
Other Donors: In 2003, official development assistance (ODA) to Morocco declined by about 6% as compared to the previous year ($316 million vs. $336 million). Grants represented about 72% of the total. The main characteristic of ODA this year is a significant shift from macro-economic to infrastructure aspects, including roads, ports, railroads, telecommunications, airports, hydro-electricity and irrigation. Assistance to social sectors stabilized at about one third of total ODA. The European Union provided almost half (48.9%) of the foreign assistance. In 2003, USAID was the second bilateral donor, on a par with Germany (4.5%) and behind France (21.6%). Coordination among donors has improved somewhat in 2004, with impetus from multilateral and bilateral donors, including USAID. Channels for exchange of information and sector coordination have been established and the host country government is engaged and playing an increased role in the process.
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